Portugal’s debt hits record €738Bn

Portugal’s economic debt accumulated by families, companies and the State increased in September for the third consecutive month hitting a new record of €738.028Bn.

The debt for that month alone climbed to €1.5Bn according to data released by the Bank of Portugal (BdP).
With the pandemic hitting economic activity hard, the ratio of indebtedness in the non-financial sector increased to 359.3% of GDP in September, skyrocketing by 21.3 percentage points compared to March this year.
The Covid-19 crisis has forced several governments to up public spending with measures supporting companies and employees with lay-off programmes and credit lines backed by public guarantees and supported by the Portuguese government and the banking sector.
At a local municipal council level, many local councils have also pressed ahead with support packages and moratoria.
This support helps explain that the increase in economic debt seen in September was mostly down to an increase in public sector debt which shot up by €900 million to €335.3Bn.
On the other hand, the private sector, which includes non-financial and private companies, saw debt climb by €600 million to €402.7Bn.
“The growth in debt in the private sector resulted from an increase of indebtedness of private individuals to the financial sector (€300 million) and from companies, €300Bn,” states the BdP.
All told, six months of pandemic caused Portugal’s economic debt to increase by €17.4Bn.